Do We Still Need HUD?

The public may be forgiven for its skepticism. Cuomo is the third “reform” secretary in the past 10 years, after Jack Kemp and Henry G. Cisneros. But HUD retains its reputation as a mess that needs cleaning up. That reputation remains largely because concern about HUD is not so much about its current performance as about its core purpose. That is, do we need HUD at all? There is good reason to think not. The assumptions that prompted its establishment in 1965 have largely been discredited, and it has undertaken new missions of questionable value.

HUD was created in an era when Americans were concerned about the decline of older neighborhoods in the newly designated “inner city.” Its founders believed that without massive public spending to renovate older housing, those neighborhoods would forever remain slums and their residents “disadvantaged.”

But HUD’s designers discounted the possibility that the new poor in the cities, particularly blacks, could follow the path of upward mobility that previous waves of immigrants had taken. In the ensuing three decades, however (as Abigail and Stephan Thernstrom have made clear in their new book, “America in Black and White”), black Americans have made their own march to better neighborhoods and the suburbs. And HUD’s expensive interventions in older, increasingly depopulated neighborhoods — from the Model Cities program of the 1960s to today’s Empowerment Zones — have done little good. In fact, there is reason to believe they have done harm.

A natural cycle of decline and renewal is produced by urban economies. As Jane Jacobs, this century’s foremost observer of cities, has written, “New ideas need old buildings”; the cheap rent and land of “declining” neighborhoods help lay the foundation of their rebirth. When government tries to prop up neighborhoods by fixing old apartments at great expense, it crowds out the sort of new ideas that produce lasting improvement. It drives small private landlords out of business by competing with them. It traps the residents of public housing — ostensibly lucky to get cheap, subsidized apartments — in a long‐​term dependence on buildings that often become the new slums. Witness our public housing projects. Continued dilapidation of parts of our inner cities is cited as proof of the continuing need for HUD. In fact, it better demonstrates how ill‐​advised the interventions of the last 30 years have been.

More recent HUD missions have fared no better. Housing vouchers, on which the department spends about $8 billion annually, attempt to “deconcentrate” the poor and move them to better neighborhoods. In doing so, they send the wrong message: that need, rather than achievement, is the way to move up the ladder in America. The hard work of those people, both black and white, who have moved up through their own effort and helped to create better neighborhoods is devalued by this program. No wonder talk radio shows are filled with homeowners complaining about Section 8 tenants (voucher holders) being introduced into their neighborhoods — and often bringing social problems. Such inherent flaws in HUD’s mission explain its continuing unpopularity.

Closing HUD would be complex. There are powerful reasons to try, however. Not the least is a potential crisis driven by financial commitments that might be larger than the department can afford — and that could result in a savings‐​and‐​loan‐​style debacle. Failed programs such as Empowerment Zones and housing vouchers — which have negative effects on the cycles of renewal that arise spontaneously in cities — suggest that HUD’s future should be one not of reinvention but of deinvention. A bold Congress would start to chart the way.